You don't really expect hard hitting journalism from Trains, do you? (And I say that as someone who has either subscribed or bought individual copies most of my life.) They've never once addressed the allegations of mismanagement with UP Steam.

If it goes in the mag, I expect it to be reasonably well-researched. Historians will use that as reference material for a half century or more. Newswire seems to be a lot like Flimsies, focused first on getting the word out and later on accuracy, insofar as needed for the cull for makes it into the mag.

David, one shouldn't file a lawsuit the moment a dispute arises; one should try to settle the matter as amicably - and practically - as possible. Even the courts would prefer this. Paying what you can and stopping is the sincerest attempt to settle the matter. Though, if I couldn't pay it all, I wouldn't pay one thin dime until we'd reached a settlement on the full amount. Blood from a stone is right; if you're a vendor sometimes you have to take a loss to salvage a relationship that can yield fruit in the future.

First thing I thought was that Polar Express is having trouble retaining partners, so it's very much in their interest to retain a large one like IP. And IP knows that, and may be playing the 600 pound gorilla. I.E. this may all be negotiation theater, as IP angles for a more favorable rate. They obviously have their eye set on 15%, and that may be a number at which it is businesswise feasible for IP. The question is, does it work for PE?

For that matter, all of the above may be combining to reveal to IP that the business just isn't feasible at current royalty rates. This could be the death of PE, or it could be a repricing that makes it possible for a lot of railroads to come back on board. Will PE settle or stand?

Obviously they're shopping too; if they can find other railroads to give the business to, they'll be happy to dump IP. I'm astonished they aren't spending a fortune lobbying in Kingston and Noblesville for that reason alone. The Thomas's and PE's of the world have a lot at stake in the bike-trail wars. Who's on the bikers' side? Schwinn? LOL

If anything, the lesson is that railroading is a very tough business, far tougher than the practitioners make it look, far tougher than the foamers imagine it to be.

David, one shouldn't file a lawsuit the moment a dispute arises; one should try to settle the matter as amicably - and practically - as possible. Even the courts would prefer this. Paying what you can and stopping is the sincerest attempt to settle the matter. Though, if I couldn't pay it all, I wouldn't pay one thin dime until we'd reached a settlement on the full amount. Blood from a stone is right; if you're a vendor sometimes you have to take a loss to salvage a relationship that can yield fruit in the future.

Actually, in this case, yes, yes you do. My guess is that the money was due to the Polar Express ("PE") licensor soon after the new year. It's now March, and the suit was filed in late February. I say if you couldn't get your dispute over the vague issues settled by the end of the month, if I were IP, I'd do the following:

1). Hold the disputed funds in a special account until he litigation is resolved; and 2). File what is called a "dec action" in the legal community. You essentially present the contract to the Court and ask that the court make a declaration as to the rights of the parties, usually on a specific set of issues.

Why file so soon? Well, Robert, we aren't talking about 10 or 20 thousand dollars here. We are talking about millions of dollars at stake. For strategic importance, if you want to be a prevailing party then you strike first, you do not wait to get sued. If the PE people want to then bring an action against you for nonpayment, then they'd have to bring it as a counterclaim. To a judge (who usually decide contract disputes), you want to be in a stronger position than being a mere defendant. Beating the other party to the courthouse, if only to negotiate a settlement later, is a way to put yourself in a stronger bargaining position, and it usually can be done for the cost of a filing fee and retaining local counsel to "sign off" on the pleadings.

Then, if I were IP's attorney, I would try to negotiate as hard of a bargain as possible. I'd point to the fact that IP just may well declare Chapter 11 bankruptcy, and that those who have UCC filings against IP (as evidenced by a search in Illinois) would probably get the majority of the money from any such filing, and if the PE people wanted to see a dime, they'd better deal.

But that's just me. I'm by no means Perry Mason. I do have nearly a decade of litigation experience though. It's how I'd recommend IP play this to its advantage, but not every attorney would agree.

In all reality, I suspect IP simply doesn't have the money to pay PE, and they paid what they could. Even if that were the case, I'd still do the above, other than holding the money in a special account. An offense in that situation would be a better defense than what may be going on now.

robertmacdowell wrote:

If anything, the lesson is that railroading is a very tough business, far tougher than the practitioners make it look, far tougher than the foamers imagine it to be.

Actually, you and I agree on something for once. There may be hope for humanity after all. That being said in this situation, if I were IP, I'd play a lot harder ball than they are.

They may have hoped, optimistically, that they could have stayed out of court. A lot of people and a surprising number of Board members are a lot more scared of court than you or I. We also don't know what private communication has been happening between IP and PE; it's entirely possible that conversation informed their decision to do what they did. It's also possible one party or the other had been inconsistent about their positions; that alone gives something to litigate. Also, you can never exclude the possibility of someone being arrogant or foolish, where railfans are concerned.

Bottom line, PE is going to have to figure out which relationship with IP is going to be most profitable going forward.

Well, given recent changes with IP and the properties it did, might still or may not in the future control, it seems as if some downsizing and focusing on the least marginal into a smaller realm overall might be under way. Until that process is complete - and by complete I mean stable for a few years, not that it's ever not ongoing - the potential value of IP as a partner won't be measurable. Trust, however - that's a judgement based on how much people do what they say they are going to do and live up to their commitments, whether it's convenient or not. Somebody plans a THOMAS event and a hurricane happens during that time, maybe you cut them some slack..... somebody misjudges, and quibbles after the fact, maybe not so much. The intangibles matter. Circumstances matter. We don't know them yet and may never have them shared with us, which is a shame - knowing what was tried and why it failed prevents more of us from doing similar things and weakens us as an industry.

_________________"Techies never minded eating bits and jots of their work. They were grit and grease inside and out and could turn a pile of junk into a magical kingdom."

You don't really expect hard hitting journalism from Trains, do you? (And I say that as someone who has either subscribed or bought individual copies most of my life.) They've never once addressed the allegations of mismanagement with UP Steam.

Which, in my eye, could be evidence that there's little to no substance to said allegations. Or that it's all the "speculation" we are being admonished to avoid.

Obvious errors have been made in the past. There was the brake-locking incident that necessitated sending out all of 844's drivers for reprofiling in record time to remove flat spots. There was an accident involving the cars/support boxcar at one point. And they're not necessarily doing the best job of answering questions about the progress or lack thereof on 4014 and 3985.

But other allegations apparently/supposedly come down to personal tiffs, management style, and personality clashes. And unless/until the entire UP steam program comes to a sudden crashing or climactic end, that's really not our business.

As for UP, there's the opinions of some of the most experienced people in the field, the simple fact of 844's need for major boiler work and clean out ahead of the federally required work, the two accidents, and the lawsuits. One might think the magazine of railroading might care to address those things of interest and much discussion by fans even if only to assure that all is well.

But I don't wish to hijack the thread so let's leave it there and agree to disagree.

Somehow, IPH has gotten at least some relief or worked something out with the Texas comptroller of public accounts, as TSRR opened on schedule and ran a Rusk to Palestine round trip on Saturday, March 4, as planned.

Another unreported reason the IP's Hoosier State is no more is the burden of the insurance policy needed to operate it. Several sponsors and trip operators have had to rescind their programs because IP no longer carries the $150 million plus liability policy.

Somehow, IPH has gotten at least some relief or worked something out with the Texas comptroller of public accounts, as TSRR opened on schedule and ran a Rusk to Palestine round trip on Saturday, March 4, as planned.

We do not know what the deal was. Mr Ellis may well have found the cash or it could also be that the State is taking everything beyond the direct expenses to cure the deficit or it could be anywhere in between.

blueflag wrote:

Another unreported reason the IP's Hoosier State is no more is the burden of the insurance policy needed to operate it. Several sponsors and trip operators have had to rescind their programs because IP no longer carries the $150 million plus liability policy.

Probably not so. IPH was providing equipment and on board crews. Amtrak was actually operating the trains.

Addendum: Without opening another can of worms here by doing so - Are you able to cite any specific instances of this?

How can one demonstrate this unless the specific territory is somehow defined in the contract? Range surrounding station, contiguous MSAs, or metes and bounds? I'm getting more interested in the guts of the thing.

_________________"Techies never minded eating bits and jots of their work. They were grit and grease inside and out and could turn a pile of junk into a magical kingdom."

I did not mean to imply that anyone was on "thin ice" the way it is usually meant on this board. I have a very high tolerance for divergent views and differing opinions. If this were my board as long as the colloquy stays reasonably civil (a bit acerbic is fine) I would let the dialog run its course until it dies a natural death. Some of you may recall that I have defended a few of the usual suspects and welcomed the conversation when one of them had the nerve to complain that noting here what was in the public record was causing him difficulty because counsel for the other side in one of his ventures actually read what was posted, did his own digging and then asked some awkward questions. There is an incredible trove of knowledge here and the discussion brings it out.

The Iowa Pacific situation is fairly complex with a number of moving parts. It is the type of thing which is a bankruptcy attorney's dream ($$$) and a creditor's nightmare ($$$). That makes it fairly easy to draw a reasonable, logical inference and get it wrong. For those of us who engage in the Black Art of the Law this is an occupational disease. if I were the Emperor of RYPN my real concern would be that an inference made here would show up on one of the other boards a confirmed fact. No real liability but a potential headache. All I meant was that the inferences made needed to be treated as inferences, not as facts.

My long suffering secretary (who looks at this board every few days) summed it up nicely: "The trouble always begins when one of those folks thinks they're important."

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